There are three main types of government bonds issued. Each type reflects the source and security of monies used to repay them, as follows:
• General obligation bonds: These bonds are issued against the general taxing powers of the issuing authority. The bondholders do not have security against an individual facility.
• Revenue bonds: These bonds are issued against revenues received from the operation of an individual infrastructure asset-for example, a toll road. The bondholders are likely to have security over the individual facility.
• Special assessment bonds: These bonds might be issued to fund infrastructure in a specific area that will be a catalyst for commercial development in that area. To reflect the public funding, there might be a specific tax on the subsequent commercial development to repay the bonds.
There are a number of variations on these main types of bonds, each of which deals with state-specific issues. For example, some bond variations address laws limiting the issue of debt. Other variations include bonds that make available different ways to provide for public infrastructure, such as the leasing of buildings and equipment, and bonds that are used for short-term funding needs.